Question 1

If a major union goes on strike, then the country would be operating inside its production possibilities frontier.

Accepted Answer

A) True 
 B)False

Question 2

The slope of a line is the ratio of the vertical distance covered to the horizontal distance covered along the line.

Accepted Answer

A) True 
 B)False

Question 3

It is difficult for economists to make observations and develop theories, but it is easy for economists to run experiments to generate data to test their theories.

Accepted Answer

A) True 
 B)False

Question 4

Figure 2-8
 
-Refer to Figure 2-8, Panel (a) . The opportunity cost of moving from point J to point L is

Accepted Answer

A)   2 donuts.
B)   2 donuts and 2 cups of coffee.
C)   2 cups of coffee.
D)   6 cups of coffee.E) C) and D)
F) B) and D)

Question 5

A circular-flow diagram is a visual model of the economy.

Accepted Answer

A) True 
 B)False

Question 6

Points outside the production possibilities frontier represent infeasible levels of production.

Accepted Answer

A) True 
 B)False

Question 7

When two variables move in the same direction, the curve relating them is

Accepted Answer

A)   upward sloping, and we say the variables are positively related.
B)   upward sloping, and we say the variables are negatively related.
C)   downward sloping, and we say the variables are positively related.
D)   downward sloping, and we say the variables are negatively related.E) A) and D)
F) All of the above

Question 8

In economics, graphs serve two purposes: they offer a way to visually express ideas, and they provide a way of finding and interpreting patterns when analyzing economic data.

Accepted Answer

A) True 
 B)False

Question 9

In the circular-flow diagram, which of the following items flows from households to firms through the markets for the factors of production?

Accepted Answer

A)   goods and services
B)   land, labor, and capital
C)   dollars spent on goods and services
D)   wages, rent, and profitE) C) and D)
F) B) and D)

Question 10

The essence of science is

Accepted Answer

A)   the laboratory experiment.
B)   the scientific method.
C)   the study of nature, but not the study of society.
D)   All of the above are correct.E) A) and D)
F) None of the above

Question 11

You know an economist has crossed the line from policy adviser to scientist when he or she

Accepted Answer

A)   claims that the problem at hand is widely misunderstood by non-economists.
B)   makes positive statements.
C)   talks about values.
D)   makes a claim about how the world should be.E) A) and C)
F) A) and D)

Question 12

Economists usually have to make do with whatever data the world happens to give them.

Accepted Answer

A) True 
 B)False

Question 13

A pie chart is a way to display information regarding two variables.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following areas of study typifies macroeconomics as opposed to microeconomics?

Accepted Answer

A)   the effects of rent control on the availability of housing in New York City
B)   the economic impact of tornadoes on cities and towns in Oklahoma
C)   how tariffs on shoes affects the shoe industry
D)   the effect on the economy of changes in the nation's unemployment rateE) B) and C)
F) A) and D)

Question 15

Figure 2-6
 
-Refer to Figure 2-6. Unemployment could cause this economy to produce at which point(s) ?

Accepted Answer

A)   A, B
B)   C, D, F, G
C)   C, F, G
D)   DE) A) and D)
F) None of the above

Question 16

Figure 2-14
 
-Refer to Figure 2-14. It is possible for this economy to produce 45 doghouses and 30 dishwashers.

Accepted Answer

A) True 
 B)False

Question 17

The nation's antitrust laws are enforced by economists at the Department of

Accepted Answer

A)   Labor.
B)   Health and Human Services.
C)   Justice.
D)   Treasury.E) B) and C)
F) C) and D)

Question 18

Production is efficient if the economy is producing at a point

Accepted Answer

A)   on the production possibilities frontier.
B)   outside the production possibilities frontier.
C)   on or inside the production possibilities frontier.
D)   inside the production possibilities frontier.E) B) and D)
F) All of the above

Question 19

Where can an economy not produce?

Accepted Answer

A)   inside its production possibilities frontier
B)   on its production possibilities frontier
C)   outside its production possibilities frontier
D)   at the endpoints of its production possibilities frontierE) A) and B)
F) None of the above

Question 20

Which of the following is not correct?

Accepted Answer

A)   When developing economic theories, graphs offer a way to visually express ideas that might be less clear if described with equations or words.
B)   Graphs are one way of expressing the relationships among variables.
C)   When studying the relationship between two economic variables, graphs allow economists to draw indisputable conclusions about causes and effects.
D)   When analyzing economic data, graphs provide a powerful way of finding and interpreting patterns.E) A) and D)
F) B) and C)

Exam 2: Thinking Like an Economist

It is difficult for economists to make observations and develop theories, but it is easy for economists to run experiments to generate data to test their theories.

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You know an economist has crossed the line from policy adviser to scientist when he or she

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Where can an economy not produce?

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Economists usually have to make do with whatever data the world happens to give them.

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Points outside the production possibilities frontier represent infeasible levels of production.

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The slope of a line is the ratio of the vertical distance covered to the horizontal distance covered along the line.

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Figure 2-6 -Refer to Figure 2-6. Unemployment could cause this economy to produce at which point(s) ?

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The essence of science is

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The nation's antitrust laws are enforced by economists at the Department of

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Which of the following areas of study typifies macroeconomics as opposed to microeconomics?

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Figure 2-8 -Refer to Figure 2-8, Panel (a) . The opportunity cost of moving from point J to point L is

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A pie chart is a way to display information regarding two variables.

Correct AnswerverifiedShow Answer

A circular-flow diagram is a visual model of the economy.

Correct AnswerverifiedShow Answer

If a major union goes on strike, then the country would be operating inside its production possibilities frontier.

Correct AnswerverifiedShow Answer

Production is efficient if the economy is producing at a point

Correct AnswerverifiedShow Answer

In the circular-flow diagram, which of the following items flows from households to firms through the markets for the factors of production?

Correct AnswerverifiedShow Answer

When two variables move in the same direction, the curve relating them is

Correct AnswerverifiedShow Answer

In economics, graphs serve two purposes: they offer a way to visually express ideas, and they provide a way of finding and interpreting patterns when analyzing economic data.

Correct AnswerverifiedShow Answer

Which of the following is not correct?

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Figure 2-14 -Refer to Figure 2-14. It is possible for this economy to produce 45 doghouses and 30 dishwashers.

Correct AnswerverifiedShow Answer

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